Japan’s biggest online fashion retailer, Zozo, is being taken over by Yahoo! Japan for $3.7 billion, in a bid to revitalize what was once a $14 billion business, according to a report by Reuters.
Yusaku Maezawa, the billionaire founder of Zozo, said he will step down from his CEO role and will sell most of his stake in the company, after making a number of blunders that resulted in the firm losing almost half its market value.
With the deal, Yahoo! Japan will have the chance to take part in Japan’s huge online fashion market, an ecosphere in which both Amazon and Rakuten have struggled to succeed. Zozo’s mall, Zozotown, dominates about half of the medium- to high-end fashion market.
Maezawa is known for his eccentricities, and his lifestyle attracted more attention than his management style. He made headlines for being the first commercial SpaceX passenger to take a trip around the moon and gained notoriety for spending hundreds of millions of dollars on artwork.
“My style may have been too top-down. … It was the right time for a new CEO,” Maezawa said. He cried as he expressed appreciation to his employees and company shareholders.
Yahoo! Japan offered 2,620 yen per share, which is a premium of 21 percent when put against the company’s closing price on Wednesday (Sept. 11), but is not as high as when the company peaked a year ago. On Thursday (Sept. 12), Zozo’s stock went up 13 percent and Yahoo! Japan’s went up 2 percent.
Yahoo! Japan is changing its name to Z Holdings next month. It is controlled by SoftBank.
Maezawa will see a windfall of an estimated $2.3 billion. He said that he would sell a stake of 30 percent, which would leave him with about 6 percent stake in the company.
Zozo saw its annual earnings go down for the first time in the last financial year, mostly due to an ill-advised made-to-measure service that was barely used and incurred huge costs.